Tariffs, Trade War Fears Slam U.S. Stocks - Forex News by FX Leaders

Tariffs, Trade War Fears Slam U.S. Stocks

Posted Monday, May 13, 2019 by
Shain Vernier • 1 min read

A massive sell-off on Wall Street has been the story this morning, led by steep losses in the U.S. indices. The tit-for-tat exchange of tariffs by the U.S. and China is prompting equities traders to reduce risk exposure significantly. For the first half hour of trade, the DJIA DOW (-500), S&P 500 SPX (-66), and NASDAQ (-241) have plunged dramatically.

At this point, trader hesitation stemming from a fresh round of tariffs is quickly escalating into a full-blown panic. With blue-chip stocks struggling to find any solid ground, the markets may be on the cusp of a broad-based correction.

Tariffs Have The DJIA On The Ropes

The key 25000 level is coming into view quickly for the DJIA. Values have already slid 500+ points and it appears that the next technical area up for trade will be the key psychological level of 25000.

June E-mini DOW Futures (YM), Daily Chart
June E-mini DOW Futures (YM), Daily Chart

Overview: As far as technical levels go, the big round numbers of 25500 and 25000 will be the key for this market. The daily trend is certainly bearish and it will take a period of consolidation near one of these areas before going long the DJIA will become a possibility.

On a side note, this week features a relatively wide-open U.S. economic calendar. In fact, there isn’t a whole lot going on before Wednesday’s Retail Sales release. Until then, market sentiment is going to hinge upon any U.S./China developments or further escalation of the trade war in general.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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